Facts and opinions related to the reprographics business and the reprographics industry as well as articles and information related to the A/E/C industry served by reprographers. This blog is intended for reprographers, for vendors who sell to reprographers and for analysts and investors who are interested in learning more about the reprographics industry. (YOU CAN CONTACT THE BLOG AUTHOR at joel.salus@mac.com or at joel.salus@me.com)

Tuesday, December 20, 2011

An article from the on-line edition of USA Today, this morning, appears below.

Over the past few months, we’ve posted at least two articles about renewed “apartment construction activity” in Boston, MA.That same type of activity is going on in several places in the U.S.

2012 will be the beginning of what eventually will be a very robust recovery for the A/E/C Industry, and that recovery will benefit reprographers.

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Housing starts jump 9.3% in November, building permits up

A surge in apartment construction gave builders more work in November. But 2011 is still shaping up to be one of the worst years in history for homebuilders.

And permits for future construction rose 5.7%, spurred by a jump in apartment permits.

The rise in permits provides hope for the housing market, though 2011 is still shaping up as one of the worst years in history for homebuilders.

The Commerce Department says builders broke ground on a seasonally adjusted annual rate of 685,000 homes last month, a 9.3% jump from October. That's the highest level since April 2010.

Still, that's far below the 1.2 million homes that economists say would be built each year in a healthy housing market.

Building permits, a gauge of future construction, rose 5.7%. The increase was spurred by more apartment permits.

Though new homes represent just 20% of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

In October, builders broke ground on a seasonally adjusted annual rate of 628,000 homes. That's barelyhalf the 1.2 million that economists say must be built each year to sustain a healthy housing market.

But building permits, a gauge of future construction, rose nearly 11%. The increase was spurred by a 30% increase in apartment permits, to the highest level in three years.

Over the past year, apartment permits have surged roughly 63%. Single-family permits have increased just 6.6% in that time.

Home construction and sales are in the midst of one of its worst years ever. Demand for new homes is weak. Record-low mortgage rates and plunging home prices have done little to help.

Overall, homebuilding dipped in 2009 to just 554,000 homes, the lowest levels in 50 years in 2009. Last year the figure rose to roughly 587,000 homes.

Builders are struggling to compete with deeply discounted foreclosures and short sales. Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage. Few homes are selling.

After previous recessions, housing accounted for at least 15% of U.S. economic growth. Since the recession officially ended in June 2009, it has contributed just 4%.

In October, sales of new homes rose slightly, largely because builders cut their prices in the face of weak demand. Sales hit a six-month low in August. And this year is shaping up to be the worst since the government began keeping records a half-century ago.

Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their houses. Still, the surge in apartments has not been enough to offset the loss of single-family homebuilding.

Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30% higher than the median price for a re-sale. That's nearly twice the markup typical in a healthy housing market.

The homebuilders' trade group said this week that its survey of industry sentiment rose in December to 21, the highest level since May 2010. Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached 50 since April 2006, the peak of the housing boom.

Archive of Blog-posts on Repro 101 when Repro 101 was hosted on IRgA web-site

To access the archive of blog posts that were put up on Reprographics 101 when Repro 101 was hosted on the IRgA web-site, go to the blog-post put up on May 31st, 2013, and, when you locate that blog-post, you will find a list of the pdf files that contain those previous blog-posts, as well as "links" to each pdf file.

About Me

40+ year involvement in the reprographics business and industry. Former Chairman/CEO of Rowley-Scher Reprographics, Former Senior Vice President & Chief Business Strategist of National Graphic Imaging (NGI). Former Managing Director of the International Reprographics Association (IRgA). Active as a Management Consultant to firms in the reprographics business. (My consulting practice is called ProActive Management Programs LLC.)